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London will remain 'financial lungs' of Europe, says Jes Staley

London can breathe easy – it will continue to be the financial lungs of Europe, according to Barclays chief executive Jes Staley.

While he admits the bank may have to move some activities to bases in Dublin or Germany, he believes that most of their European banking business can continue to be done from the UK. “I don’t believe that the financial centre of Europe will leave the city of London. There are all sorts of reasons why I think the UK will continue to be the financial lungs for Europe”

He admitted that other European capitals had been heavily courting the bank to move operations their way. “It’s very interesting that one minute no-one wants bankers in their back yard, the next they are inviting you over to a barbecue.” His commitment to the UK will be welcomed by the Prime Minister, Theresa May, and the Chancellor, Philip Hammond, who will address delegates at Davos today.

It comes 24 hours after HSBC said it would move 1,000 jobs to Paris and UBS said it would shift up to 1,000 jobs to Europe after the government resolved it would be leaving the European single market. Theresa May will be meeting big Wall Street bosses while here today, including Lloyd Blankfein of Goldman Sachs and Larry Fink of giant asset manager Blackrock – both card carrying members of the “global elite” she has been so scathing about.

Barclays office in Canary Wharf
Barclays office in Canary Wharf

Barclays is the world’s biggest underwriter of European government bonds and it seemed to many watchers that it might be difficult to continue that activity outside the European single market. Mr Staley said he believed that changes in the legal structure of the bank – by opening a German branch of its Dublin operations for example – would be enough to satisfy European and UK regulators and be in the interests of European governments.

He was upbeat about the prospects for banks in general. saying that the prospect of stronger economic growth in the US under Donald Trump and an associated rise in interest rates would boost bank profitability. The bank still has an unfinished battle with US legal authorities after it balked at demands from the Department of Justice to pay what it considered unreasonable fines for its role in the subprime mortgage crisis.

It is choosing instead to fight the US government in court. Mr Staley insisted that the change in administration (and a new attorney general) in the US was not part of their strategy. “We will still be facing the same prosecutors but we believe in the US justice system to deliver a fair outcome.” You don’t take the US government to court unless you think they are being very, very unreasonable.

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